If a commodity index shows that the price of a commodity is continually rising, what does this indicate about the market?
Answer(s): B
The correct answer is 'demand is exceeding supply'- If everyone wants to buy something, the sup- pliers will likely increase the price.If there was little demand or there were threats of substitutions, this would likely result in a price decrease.
Which of the following are primary sources of data? Select TWO.
Answer(s): D,E
Primary data includes trade fairs and exhibits, and phone calls to current suppliers. The others are examples of secondary data.Remember primary= you do it yourself, Secondary = someone else did it.
Commodities are items which can be traded on the stock exchange. These are generally divided into four categories. What are these four categories?
Answer(s): C
energy, agriculture, metals, livestock are the four trading categories on the stock exchange. Some- times there's a 5th category added which is 'environmental credits'. This is a fairly new thing and you don't need to know anything about this for this exam.Question no commodities will mainly centre around characteristics of commodities and factors that affect pricing.Commodities are discussed much more in detail in L5M4. At level 4 you just need a basic overview.
When looking at credit scores, a supplier may be classified as a high risk for reasons that are not linked to poor credit. Which of the following could these be? Select TWO
Answer(s): B,C
New organisations or those with no loans/ credit cards may have low credit scores. This is simply because they do not have enough financial history to make their scores good. That means banks au- tomatically class them as higher risk, because they simply don't know that they're trustworthy yet.
A company's balance sheet will show you which of the following?
a balance sheet shows 'equity, assets and liabilities'. The other financial statements you need to know for this exam are cash flow statements and and income statements. If you're not familiar with these three I strongly recommend you do some further reading on this before the exam if you can. This is helpful: How the 3 Financial Statements are Linked Together - Step by Step (corporatefinanceinstitute.com)
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